Standing Committee D

[Mr. Bill O'Brien in the Chair]

Courts Bill [Lords]

Clause 77 - Family Procedure Rule Committee

Amendment proposed [this day]: No. 79, in 
clause 77, page 36, line 36, leave out 'one person with' and insert 'two persons with current'.—[Mr. Hawkins.]
 Question again proposed, That the amendment be made.

Bill O'Brien: I remind the Committee that with this we are discussing amendment No. 87, in
clause 83, page 38, line 36, after 'with', insert 'current'.

Christopher Leslie: Before we were so rudely interrupted by lunch, I was halfway through an explanation of why amendments Nos. 79 and 87 should not be made to clause 77, which relates to the composition of the family procedure rule committee. I shall add to the comments that I have already made the fact that the Government remain convinced that having a single lay member on the family procedure rule committee will ensure that the voice of the lay person is heard when rules are being drafted. I shall briefly repeat the reason why we feel that only one seat is necessary. As all hon. Members know, committees can become large and unwieldy if the number of members is excessive. It was therefore a matter of judgment where we drew the line, but we believe that we have provided for adequate representation on the committees. I hope that the hon. Member for Surrey Heath (Mr. Hawkins) will withdraw his amendment.

Nick Hawkins: Welcome back after the lunch break, Mr. O'Brien. In the light of what the Minister has said, I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Question proposed, That the clause stand part of the Bill.

Nick Hawkins: I have one brief question about clause 77 as it stands. Once again, I shall raise a point that has been raised with me by the Institute of Legal Executives. Before lunch we dealt with amendment No. 141, which would have ensured the inclusion of one legal executive who had particular experience of practice in family proceedings. The Government resisted that amendment, and we withdrew it, although we voted on a similar amendment with regard to criminal matters.
 The Institute of Legal Executives raised the issue of the current drafting of clause 77(2)(l) and (n). It has offered two alternative interpretations of those paragraphs, and I agree that they could be read in 
 either way. If the Minister can say today which of the two interpretations is correct, I would be grateful. If not, I would be grateful if he wrote to me and other Committee members in due course—I appreciate that my question is slightly technical. The institute asked whether paragraphs (l) and (n) should be read in the light of preceding paragraph (k), which refers to a person being 
''granted by an authorised body, under Part 2 of the 1990 Act, the right to conduct litigation in relation to all proceedings in the Supreme Court''.
 Alternatively, the reference in those paragraphs to one person who has been granted that right could be read in the light of subsection (5), which makes provision for the Lord Chancellor to consult authorised bodies for the purposes of section 27 or 28 of the Courts and Legal Services Act 1990. 
 If the latter interpretation were correct, that could imply that all those with rights granted under either section 27 or 28 of the 1990 Act were eligible to be appointed under paragraphs (l) and (n). However, if the first of the two interpretations were applied, legal executives would not be eligible for appointment, as they currently have no independent rights to conduct litigation. If the second interpretation were applied, legal executives who are granted rights of audience by their institute in the county court or magistrates court could be eligible. The Institute of Legal Executives is obviously hoping that the second interpretation is correct. It would be helpful if the Minister could clarify that point now, or write to me after he has considered the matter with his officials.

Christopher Leslie: The hon. Gentleman has raised a point on behalf of those who, in turn, have raised queries with him. My understanding is that the former of his two explanations is likely to be right: in other words, the persons who may be appointed under subsection (2)(k), (l) and (m) are those who have been granted the right to conduct litigation in relation to all proceedings in Supreme Court by an authorised body. That seems to be how the clause is drafted.
 As usual, I should say that if on reflection I prove wrong, I will be happy to write and correct my interpretation for the hon. Gentleman, because he raises an issue that is clearly of concern to the Institute of Legal Executives. It is a fair point to make, and I shall clarify further if my explanation is wrong. On the whole, I think that clause 77, in defining the membership of the family procedure rule committee, strikes the right balance, so that there will be a good spread of experience and qualification. I hope that the Committee will allow the clause to stand part of the Bill.

Nick Hawkins: I am grateful to the Minister, and look forward to receiving further clarification if he needs to provide it.
 Question put and agreed to. 
 Clause 77 ordered to stand part of the Bill. 
 Clauses 78 to 85 ordered to stand part of the Bill.

Clause 86 - Alteration of place fixed for Crown Court trial

Nick Hawkins: I beg to move amendment No. 93, in
clause 86, page 40, line 10, leave out 
 'by a judge of the High Court'.
 The amendment relates to a small point on which we wanted to probe the Government. The Government propose to change the arrangements for moving a Crown court trial when there is an application for variation of the place fixed for it. Although we understand why the Government might say that that sort of application need no longer be heard in open court, we think that it would be helpful if such applications for an alteration were heard by a High Court judge. That is why we have sought the deletion of that phrase, and I shall be interested to hear what the Minister has to say about it. 
 In terms of the convenience of witnesses or other court users in a Crown court trial, applications for taking a major step such as moving a trial from one venue to another are important, but I hope that they will not be too common. The traditional practice, whereby which such applications are heard by what is known in the profession as a ''red'' judge—a High Court judge—should continue. I am slightly puzzled as to what the Government have in mind, and I will listen with interest to what the Minister has to say.

Christopher Leslie: I am not entirely sure that the amendment would achieve what the hon. Gentleman hopes it would, but I will not be too pedantic about drafting issues. I will take it that this is a probing amendment, intended to flush out the true reasons behind clause 86.
 We feel that we need to aid the simplification of court procedures wherever that is possible, and to help give courts as much flexibility as possible so that they can manage the cases before them. The amendment is unnecessary and unhelpful in that respect. 
 Clause 86 simplifies the proceedings of the Supreme Court Act 1981. Section 76 of that Act sets out what has to be done if the defendant or the prosecution wants to alter the location of the trial of a case before the Crown court. If the defendant or the prosecutor is dissatisfied with the location, they can apply to the court for a direction varying the place of the trial. Section 76 requires such an application to be dealt with by a High Court judge in open court. The time has come for those provisions to be changed. In most cases, they are unnecessary. An unnecessary delay in proceedings can be caused by the requirement for there to be both a High Court judge and—in particular—an open court hearing, simply on the issue of moving the location of the trial. 
 Clause 86 makes it clear that those applications do not have to be dealt with by a High Court judge or held in open court. They can be dealt with by the presiding judge in the normal way, without the open court process. I hope that I have managed to clarify the purpose of clause 86.

Nick Hawkins: It is worth getting that on the record. In the circumstances, I am content to beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 86 ordered to stand part of the Bill. 
 Clauses 87 to 91 ordered to stand part of the Bill.

Clause 92 - Fees

Christopher Leslie: I beg to move amendment No. 146, in
clause 92, page 44, line 30, leave out subsection (2).

Bill O'Brien: With this it will be convenient to discuss the following:
 Government amendments Nos. 147 and 148.

Christopher Leslie: First, I will address amendments Nos. 146 and 147. Clause 92(2) was added in another place, and it has the effect of making it a statutory requirement that
''the Lord Chancellor shall have regard to the need to facilitate access to justice''
 when prescribing fees in a civil court. 
 After very careful consideration, the Government have come to the conclusion that although subsection (2) is not strictly necessary as it simply confirms what is already the position, its effect should be included in the Bill. The Lord Chancellor's fee policy principles, announced to Parliament in 1998, enshrine the Government's assurance that fees should not prevent access to justice and that litigants of modest means should be protected. 
 In addition, in the Witham case, the Court of Appeal has already confirmed that a citizen has a constitutional right of access—although not a right of free access—to the courts. A system of exemptions, remissions and reductions already exists under the current fee-setting powers to achieve that for less well-off litigants. Automatic exemption is available for litigants on specified means-tested benefits or tax credits. Those who do not qualify for exemption but who would suffer hardship if required to pay fees—or pay them in full—may be granted discretionary remission in full or in part. In addition, a public subsidy has already been introduced for certain types of family proceedings. 
 Clause 92 includes, for the first time, an express power to exempt or remit fees. That, along with any new fees orders, will be subject to wide consultation with heads of division and, for the first time, the head and deputy head of civil justice and, for civil proceedings, the Civil Justice Council. It will also, for the first time, be subject to parliamentary scrutiny by way of the negative resolution procedure. 
 In recognition of the importance of ensuring that the less well-off in our society can obtain access to justice, we wish to concede and go along with the spirit of the amendment that was tabled in the other place. However, we are still worried about the wording of subsection (2). As currently drafted, it is deficient in that it is in the wrong place in the clause and too narrow in scope. We want to ensure access to justice for the less well-off through the system of exemptions and remissions under subsection (3). 
 However, subsection (2) as drafted requires the Lord Chancellor to have regard to the need to facilitate access to justice only when prescribing fees under subsection (1). He is not required to have such regard when providing for exemptions or remissions by virtue of subsection (3). That deals with problem of the subsection that was added in another place being in the wrong place. 
 The amendment will ensure that the Lord Chancellor must have regard to the principle that access to the courts must not be denied, when including a provision in an order under the clause. That will, for the first time, place the common law position established by the Witham case in the Court of Appeal on a statutory footing. That was urged on us, not least by the Select Committee on the Lord Chancellor's Department when it considered the Bill. I am glad that we have been able to respond to some of its worries. It is the Government's view that those who can afford to meet the cost of the part of the civil justice system that they are using should be expected to do so. Those who cannot will be supported by a system of exemption, remission and reductions. 
 Amendment No. 148 is a consequence of subsection (11), which was added in another place and will prevent judicial salaries from being taken into account when setting fees. A statutory provision stopping the recovery of the costs of judicial salaries when prescribing fees would be an undesirable obstacle to the Lord Chancellor's powers in exercising his ministerial responsibilities. The Government's policy is to recover the full cost of services provided, including judicial salaries, based on the general principle that parties are expected to pay the full cost of the part of the civil justice system that they are using to resolve their disputes. The general policy of recovering most of the costs of the courts through fees ensures the best targeting of scarce public resources. These are public expenditure decisions for the Government. 
 The Government's policy of setting fees and charges is set out in the Treasury's fees and charges guide. The guide explains that fees should be set to recover the full cost of the individual services provided, subject to any agreed subsidies. The existing subsection (11) would provide a subsidy for all types of cases, including business cases brought by large corporations. The Government consider that an approach that closely targets those in need by way of the system of exemptions, remissions and subsidies is a more cost-effective way to ensure access to justice than excluding whole categories of costs from what should be payable by litigants.

Nick Hawkins: With his usual courtesy, the Minister may have written to other members of the Committee too, but I am certainly grateful to him for having written to me explaining the background to the amendments that the Government tabled last week. His letter was dated 3 July, and it is fair to say that we received earlier advice about the Government's thinking on such matters. I am pleased that they have accepted the spirit of what my noble Friends, led by Baroness Anelay of St. Johns, did in another place
 by inserting the requirement to facilitate access to justice.
 The Government have been right to acknowledge the strong view held both by the Select Committee and by those in another place that we needed a reference to access to justice in clause 92. We do not object to the way in which the Government have chosen to approach the matter. 
 They have acknowledged both what my noble Friend said in another place and the report of the Select Committee. Government amendment No. 147 would re-insert—if I may put it that way—the same kind of obligation in the clause in a slightly different way, and No. 146 would replace what was previously there. That is acceptable. 
 Government amendment No. 148 is different. The Lords inserted a specific requirement, which the Government are seeking to remove. There is a good reason why judicial salaries should not be taken into account. Those are in a different category from all the other expenditure that we are talking about. I understand that the Government are trying to make the system self-funding, but to incorporate judicial salaries as part and parcel of their balance sheet is wrong in principle. To do so would confuse the independent position of the judiciary with a potential cost-cutting, book-balancing exercise. 
 The official Opposition in both Houses feel passionately that judicial salaries should not form part of the equation. There is a great danger in that. It is reasonable for the Government to say that they want to balance the rest of the system, but the salaries of the judiciary should not be included in that account, because they are not to do with the fees levied in relation to the use of the courts. A mature democracy takes on the public expenditure obligation of judicial salaries, and says, ''We shall have a legal system in which the most highly qualified people we can find will sit as members of the professional judiciary.'' The Government should treat that obligation as separate from the costs of running the system. 
 I detect in the Minister's briefing a little of the politics of envy, which seems to run as follows: ''We can't have commercial cases on behalf of big companies. They're getting the benefit of the quality of our judiciary, so they ought to pay for it. They shouldn't have any kind of hidden benefit.'' I do not blame him for that—he is new to his responsibilities. Judges and the salaries they are paid are in a different category from everything else that we are discussing, and I urge my hon. Friends to vote against Government amendment. No. 148.

Norman Lamb: I agree with the hon. Gentleman's argument. Subsection (11) was introduced in the House of Lords and it should stay.

Angela Watkinson: I shall speak briefly to Government amendment No. 147, in so far as it relates to access to justice. I shall also refer to the letter from the Minister to my hon. Friend the Member for Surrey Heath, which says
''those who can pay should be expected to pay the full cost of that part of the civil justice system that they are using to resolve their dispute.''
 There are two groups of people who have ready access to justice. First, there are the wealthy, who can afford to risk personal loss should their action be unsuccessful. Secondly, there are people who are entitled to full exemption, either by a fees exemption or through legal aid, because they are benefit-dependent, or for another reason. Because those people make no personal contribution, no personal risk is involved. They do not face the prospect of financial loss and are more likely to seek legal remedy. They have greater access to the law than the vast majority of people—the average taxpayers—who cannot afford the personal risk of financial loss involved in seeking legal action. 
 May I press the Minister to say a little bit more about how widely fees exemptions might be used, and how the ability to pay would be assessed?

Christopher Leslie: First I shall answer the hon. Member for Upminster (Angela Watkinson), who implied that if certain people were exempt from fees, they might not have the personal motivation to stave off litigation, which might encourage them to become more litigious because there would be no financial discouragement from going to court. That has been debated for many years, and in particular since the Opposition considered the question of legal aid. I am not convinced that the hon. Lady would be getting the balance right by not having a system of full exemptions. Fees are only one part of the overall cost of litigation; solicitors' fees are far higher than court fees, are a burden on those entering the litigation process, and can be a financial disincentive from taking a case forward.
 The current arrangements strike the right balance of making sure that we do not deny individuals access to justice because of their means. We need a system of exemptions. There is a detailed process by which exemptions and omissions are related to the number of state benefits, and that informs the court of whether certain fees should be remitted. I could find out some of those details if the hon. Lady would like me to. In 1997, the Lord Chancellor extended the exemption criteria to include income-based jobseeker's allowance, family credit and disability working allowance. In 1999 that was updated to include recipients of working family tax credit, disabled persons tax credit and so forth. There have been further revisions to reflect the new working tax credits, child tax credits and pension credits. By the end of this year, more than 5 million people will be eligible for automatic exemption from court fees. 
 I believe that that strikes the right balance and ensures that people are not discouraged from bringing proper cases. It is up to the courts to make a judgment on whether a case is reasonable. Whether a fee is a barrier, an incentive or disincentive, the other approach is nevertheless wrong.

Angela Watkinson: May I press the Minister a little further? My point was that average people—those in between those two extreme groups that I described—are deterred from access to the law because of the costs. However justified their cases might be, a lot of
 people do not seek remedy in law. They are not eligible for legal aid or exemptions, and they are not wealthy enough to be able to sustain the cost if things do not go their way.

Christopher Leslie: The hon. Lady is focusing in particular on some of the legal aspects in relation to solicitor's costs and so forth. I do not know of many cases where the court fees themselves were a disincentive to coming forward with a case. However, I understand the hon. Lady's point. The system reflects the levels of assistance that those above a certain threshold can get as one goes up the income scale. That balance has been correctly struck.
 I am pleased that the hon. Member for Surrey Heath acknowledged the Government change to the Bill in that respect, and accepted the principle that access should not be denied, which we have enshrined in amendment No. 146. However, he was especially critical of amendment No. 148, which would remove subsection (11), which was added in the other place. That subsection would prevent cost recovery of judicial salaries. Judicial salaries were excluded from the definition of recoverable costs until 1992 on the basis that the majority of judicial salaries were not required to be included in the estimates of expenditure that the former Lord Chancellor's Department presented to the House of Commons each year. 
 That was because they were traditionally drawn from the Consolidated Fund. 
 The point that I seek to push is that that money, whether drawn from the Consolidated Fund or from estimates, is still a charge on the taxpayer, and it would be wrong to make a distinction simply according to whether the money comes from the Consolidated Fund or from estimates. In line with that, the previous Administration took the view that those costs, like others, should be borne by litigants rather than the taxpayer. In 1994, the then Lord Chancellor, when setting out his expenditure plans, announced that he had decided to phase out the judicial subsidy and move closer to full cost recovery for civil business. Fees were then restructured to incorporate judicial costs. 
 As I said in response to the hon. Member for Upminster, although fees obviously recover a certain amount of the cost, they do not account for the biggest part of the expense of civil litigation; there are other costs involved, too. However, I feel that it is a fair principle for the Government to seek to recover some of those costs, including judicial salaries, not least as that principle was established by the previous Administration. I think that the hon. Member for North Norfolk (Norman Lamb) wishes to intervene. [Interruption.] No, he does not—although he was listening intently in a manner that suggested that he would intervene at any moment. Clearly, I interpreted that wrongly. 
 I hope that with those comments, I have answered the points raised by the hon. Member for Surrey Heath.

Nick Hawkins: I repeat that although we are quite happy with what the Minister says about Government amendments Nos. 146 and 147, we will seek to divide the Committee on Government amendment No. 148.
 Amendment agreed to. 
 Amendment made: No. 147, in 
clause 92, page 44, line 35, at end insert— 
 '( ) When including any provision in an order under this section, the Lord Chancellor must have regard to the principle that access to the courts must not be denied.'.—[Mr. Leslie.]
 Amendment proposed: No. 148, in 
clause 92, page 45, line 16, leave out subsection (11).—[Mr. Leslie.]
 Question put, That the amendment be made:—
The Committee divided: Ayes 7, Noes 5.

Question accordingly agreed to. 
 Clause 92 ordered to stand part of the Bill.

Clause 93 - Award of costs against third parties

Nick Hawkins: I beg to move amendment No. 95, in
clause 93, page 45, line 24, after 'of', insert 
 'all or any part of the'.

Bill O'Brien: With this it will be convenient to discuss the following:
 Amendment No. 96, in 
clause 93, page 45, line 28, leave out 'serious'.
 Amendment No. 97, in 
clause 93, page 45, line 28, after 'serious', insert 'and wilful'.
 Amendment No. 98, in 
clause 93, page 45, line 31, at end insert— 
 '( ) Regulations made under this section must provide that a third party costs order shall not be made unless the court considering making the order has 
 (a) notified the third party that it is considering making a third party costs order against him, and 
 (b) if the third party so requests, held a hearing to determine whether the third party has been guilty of serious misconduct and whether it is appropriate to make an order against him.'.
 Amendment No. 99, in 
clause 93, page 45, line 31, at end insert— 
 '( ) Serious misconduct shall be an intentional or reckless act that materially contributes to the delay or abandonment of a trial which thereby causes costs to be incurred.'.
 Amendment No. 101, in 
clause 106, page 58, line 4, after '(3)', insert 
 'or under section 93 (award of costs against third parties)'.

Nick Hawkins: We have views about what ought to be written under clause 93 about the awarding of costs
 against third parties. In particular, we considered that it was important to insert the words in amendment No. 97. After the word ''serious'' we should insert ''and wilful.'' We also considered that regulations under the subsection
''must provide that a third party costs order shall not be made unless the court considering making the order has
(a) notified the third party that it is considering making a third party costs order against him, and
(b) if the third party so requests, held a hearing to determine whether the third party has been guilty of serious misconduct and whether it is appropriate to make an order against him.''
 Amendment No. 99 states that 
''Serious misconduct shall be an intentional or reckless act which materially contributes to the delay or abandonment of a trial which thereby causes costs to be incurred.''
 Those serious points ought to be taken into account. If costs are to be awarded against a third party, prior notification to that third party is essential. It is part of the way in which our courts have traditionally operated. Costs should not be awarded against a third party unless that person has had the right to be heard. It is a fundamental principle of English justice that those who may be penalised by the courts have the right to put their case. If protection and precautionary wording is inserted, clause 93 will be much fairer. 
 We feel strongly about those points. I shall listen with interest to what the Minister says in response, but many people consider that clause 93 does not give a fair balance and sufficient rights to third parties against whom orders may be made. I can envisage that those involved in the press may have strong views about the matter. When I received representations from organisations such as the Fleet Street Lawyers Society, although I would not necessarily go all the way in supporting their views, I considered that there were points in the submissions that ought at least to be debated. It is on that basis that we tabled the amendments.

Norman Lamb: I strongly support the basis of the clause. It is right that there be a basis for recovery of costs against third parties, but there is always a danger of creating bad law when there is a sense of injustice about a particular case or a group of cases that leads to precipitate action by Governments. The Dangerous Dogs Act 1991 is always rolled out as a classic example, but there are many other examples of legislation that was designed to attack a particular mischief, but that ended up with inadequate safeguards, or not achieving the objective that it was designed to achieve.
 I am acutely conscious that one of the motivations for the provision is the case involving the Leeds United footballers. There was a widespread view that the loss of that trial and the enormous costs to the public purse were an outrage and that the press, which was responsible for it, should have been required to pay the costs lost, quite apart from the damage to the process of justice that was experienced in that case. 
 I suspect that there is not enormous sympathy for the press barons among the public at large, but it is important in a democracy that safeguards are in place to protect the rights to fair reporting of criminal trials, which we all want. The danger is that, without 
 adequate safeguards, with these provisions, one could end up with newspapers and other parts of the media feeling constrained with regard to reporting fairly on trials because of the possible consequences. 
 I wish to deal with some of the specific points that have been raised. I have also received the briefing from the Fleet Street Lawyers Society, and it makes important points that need to be considered and debated. One point is about whether the provisions comply with European convention on human rights rules on rights to freedom of expression and open justice. I would appreciate a response on that from the Minister. The briefing states that there is a danger that the provisions will fall foul of the convention. There is a lack of certainty about the way in which they could be applied. 
 The FSLS also refers to the Contempt of Court Act 1981, where there is a specific provision that the leave of the Attorney-General must be obtained before a power can be exercised under that Act. There is no comparable provision here. Why not? 
 The absolute importance of notification and the opportunity to be heard before a ruling is made is an essential element of natural justice. One of the amendments of the hon. Member for Surrey Heath provides for that and I support the case for it. 
 Finally, there is the question of the interpretation of ''serious misconduct''. That does not involve anything that is illegal or unlawful, because there is no definition of what we mean by ''serious misconduct''. There must be certainty in law for law to be good. We have to be clear about what that phrase means. Another amendment of the hon. Member for Surrey Heath would at least provide a basic definition of what we are talking about here. It also combines wilfulness with seriousness in the description of the misconduct. 
 These are serious points, and it is important that the Minister fully responds to the concerns that have been raised. There must be adequate safeguards to ensure that there is fair reporting of criminal trials.

Christopher Leslie: While hon. Members have raised points with great brevity, I shall have to respond in detail. I hope that hon. Members will bear with me because this is a large group of amendments, and I will need to take them one at a time.
 Amendment No. 95 would insert in the Bill that the court may order a third party to pay 
''all or any part of the''
 relevant costs—in other words, that it can decide the proportion of the costs that the third party should pay. I am concerned that that amendment might create a perverse contrast with existing legislation. By spelling out 
''all or any part of the''
 costs, the clause would create a contrast with section 19(1) of the Prosecution of Offences Act 1985, which provides that: 
''The Lord Chancellor may by regulations make provision empowering''
 the courts 
''in any case where the court is satisfied that one party to criminal proceedings has incurred costs as a result of an unnecessary or improper act or omission by, or on behalf of, another party to the proceedings, to make an order as to the payment of those costs.''
 Including the phrase 
''all or any part of''
 in one section but not in another could form the basis of an argument that the section that did not include that phrase might not permit an order to be made as to part of the costs only. 
 In addition to that danger, the amendment is unnecessary. The clause already allows the court to make an order for all or any part of the costs wasted or incurred. Hon. Members will enjoy what I am about to say. It says in my notes that flexibility is inherent in the words ''as to'' payment of costs. For example, an order requiring payment of half the total costs is an order ''as to'' the payment of costs, as is an order for the payment of all costs. 
 Amendment No. 95 is unnecessary. Lord Goodhart tabled a similar amendment in another place and was entirely satisfied by the reply that he received from my noble Friend Baroness Scotland. Amendments Nos. 96, 97 and 99 examine the concept of ''serious misconduct'' that would trigger an order, and propose a definition of the impropriety that might attract a third party costs order. The intention of amendment No. 96 is to reduce ''serious misconduct'' to ''misconduct''. 
 Amendment No. 97 would require misconduct to be serious and wilful. Amendment No. 99 would require that serious misconduct be either reckless or intentional, and must contribute to a delay or abandonment that causes costs to be incurred. We have considered carefully how best to define the scope of the court's new power and have chosen the simple term ''serious misconduct'' without further elaboration. That makes amply clear that the power is exceptional and only intended to catch improprieties that are considered to be serious or grave, while leaving the court maximum flexibility to order third party costs in appropriate cases. The inclusion of further words to define or limit the term ''serious misconduct'' would unintentionally run the risk of excluding circumstances that cannot now be foreseen. For example, we believe that serious misconduct would cover the case of a juror who preferred to go to the races rather than attend court, or a newspaper that published a prejudicial article that caused a criminal trial to be adjourned or abandoned. 
 We do not want to catch a juror who is 15 minutes late for court through no fault of his own, or a witness who has been intimidated and fails to turn up without due notice because he genuinely fears for his own safety. While those may be misconduct of a sort, they should not attract A liability for costs. We therefore believe that the word ''serious'' is necessary. To remove it would widen the scope of the legislation beyond that for which it is intended.

Norman Lamb: Is the Minister envisaging that serious misconduct may be something that falls significantly short of contempt?

Christopher Leslie: Not being one to interpret court matters, I am not qualified to answer that question. If inspiration strikes, I will elaborate on the matter. I can answer the hon. Gentleman's point about the European convention on human rights. He asked about the term ''serious misconduct'' in that respect. The concepts of both ''misconduct'' and ''serious misconduct'' are already used in other legislation elsewhere without being defined in any further detail. So far there has not been a problem with that definition, nor do we feel that there are human rights implications. When contempt is relevant—in publicity matters, for example—it may fall short of contempt, but not by very much. The clarification of that expression is flexible.
 Amendment No. 97 would add the concept of ''wilful'' misconduct. That would be limiting and undesirable. 
 An impropriety may be serious but not wilful. For example, publishing a newspaper article reckless of the potential impact on a trial should be capable of being caught by the courts, even though it may not have been done wilfully in the sense that there was no wilful intent to disrupt the administration of justice. 
 However, it is reasonable to believe that professional journalists or editors would understand the high degree of care that needs to be taken with articles about those involved in or related to current criminal proceedings. The word ''wilful'' could unduly restrict the court in cases of reckless acts or omissions where a third party costs order would be appropriate. 
 Amendment No. 99 seeks to limit the requirements to be satisfied before a costs order can be considered by the court, by limiting the definition of ''serious misconduct'' to an ''intentional or reckless act'', the act to one that makes ''a material contribution'' to the mischief, and the mischief to ''delaying or causing the abandonment'' of a trial. 
 As I have said, the Government believe that it should be for the courts, after considering all the facts of each case, to determine which improprieties, including omissions as well as acts, constitute serious misconduct. The provisions in clause 93 allow the courts to do so. Where serious misconduct has been established, the courts can determine whether and to what extent it is appropriate for the third party to pay the relevant cost. That will turn principally on the extent to which the serious misconduct has caused a party or parties to the proceedings either to waste or to incur costs.

Norman Lamb: Is the Minister not at all concerned that by allowing a wide description courts could interpret the provision in different ways and that the amendment, by defining serious misconduct as either intentional or reckless, which materially contributes to delay or abandonment, creates a framework within which courts can properly assess decisions about awarding costs? It seems that it gives direction to courts that will be helpful to them and will prevent a very wide discretion from being exercised.

Christopher Leslie: I disagree with the hon. Gentleman. I have already explained how adding further terms involving serious misconduct would potentially create adverse consequences and would not give the court the scope to ensure that those cases of serious misconduct were treated exactly as they should be. I believe that there is ample definition for the circumstances that we are talking about, and that it should be for the courts, after considering the facts of each case, to determine which improprieties, including acts not undertaken or omissions, would constitute serious misconduct.
 For those reasons I am also wary of amendment No. 99. This is the rationale by which we have proceeded in drawing up the provision, and it is why we do not feel that adding other notions as the amendment suggests would be desirable. 
 The hon. Member for North Norfolk supported amendment No. 98, which was tabled by the hon. Member for Surrey Heath. It proposes that when the court is considering making a costs order, the third party must be notified and given the opportunity to make representations before any such order is made. We accept that the third party must have the right to a hearing, but we propose that that be provided in the regulations, not in the Bill itself. 
 In respect of notice of representation for third parties the Government intend to follow provisions already existing in regulations made for related cases under part II of the Prosecution of Offences Act 1985. Regulations 3 and 3B in those circumstances provide that parties to the proceedings who have acted improperly, and legal or other representatives who have acted negligently, may make representations to the court before any costs order is made against them. I hope that is helpful to hon. Members who are concerned about amendment No. 98. 
 In those cases, it has been sufficient for the issue of representations to be dealt with in regulations, not in a Bill, and we believe that the same applies in these circumstances. I assure the Committee that we will make similar provision in the regulations in respect of third parties. 
 Amendment No. 101 proposes that any regulations made under the clause that deal with the award of costs against third parties should be made by way of the affirmative resolution procedure. In preparing the provision, we took the view that none of the usual reasons for using the affirmative resolution procedure applied in this case. The Select Committee on Statutory Instruments raised no objections in its report on the Bill, and hon. Members will know that we attach great importance to its judgment on such matters. 
 Secondly, we see no reason why the regulations made under clause 93 should require the affirmative resolution procedure, when the existing provisions that they are mirroring have been subject to the negative resolution procedure in other Acts such as the Prosecution of Offences Act 1985. For reasons of consistency, we think that the negative resolution procedure is amply sufficient. 
 I hope that I have addressed all the amendments in the group in sufficient detail, that the Committee 
 recognises that the amendments would not be justified, and that they will be withdrawn.

Nick Hawkins: I am grateful to the Minister for spending a little time going through all the amendments. He will appreciate that both the hon. Member for North Norfolk and I feel quite strongly about the issues. It was particularly helpful to hear the Minister's response to amendment No. 98, in which he made it clear that third parties will have the right to be heard before any third party costs order is made against them. Of course, amendment No. 98 simply says ''Regulations . . . must provide'', so we were still saying—as was the Minister—that the details would be in regulations. However, the Minister says that he does not want the wording that we have put forward to be added to the Bill because he will make the regulations anyway. Now that he has said so on record on behalf of the Government, we have achieved our main object.
 I do not entirely agree with all the Minister's responses on the other amendments. I would have preferred to include the definition of ''serious misconduct'' given in amendment No. 99, and I think that it would have been helpful to include ''serious and wilful'', too. However, I shall not detain the Committee by dividing it on the amendments, as we have dealt with what I regard as the most important issue of all—that third parties should be guaranteed a right to be heard before a costs order is made against them. I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn. 
 Clause 93 ordered to stand part of the Bill. 
 Clauses 94 and 97 ordered to stand part of the Bill. 
 Schedule 6 agreed to.

Clause 98 - Periodical payments

Amendment proposed: No. 155, in 
clause 98, page 49, leave out lines 38 to 40 and insert— 
 '(9) But— 
 (a) an order linking the periodical payments to the retail prices index shall not be made in respect of damages for the cost of future care or medical expenses; and 
 (b) in any other case an order for periodical payments may include provision disapplying subsection (8) or modifying the effect of subsection (8).'.—[Norman Lamb.]

Bill O'Brien: With this it will be convenient to discuss the following:
 Amendment No. 105, in 
clause 98, page 50, leave out from beginning of line 20 to end of line 17 on page 51.
 Amendment No. 106, in 
clause 98, page 50, line 23, at end insert 
 'save that this provision does not apply to any case in which the injuries involved occurred prior to the date on which the provisions of this Part of the Act comes into force.'.
 Amendment No. 108, in 
clause 98, page 50, line 30, at end insert— 
 '( ) An order under this section shall apply only to cases in which it is admitted or proved to be a significant prospect of serious deterioration, or development of a serious further medical complication affecting the relevant party involved, which is admitted or proved to be consequent from the act or omission which gives rise to relevant cause of action, as identified by the medical evidence before the court.'.
 Amendment No. 107, in 
clause 98, page 50, leave out lines 42 and 43.

Nick Hawkins: I am delighted to have caught out the hon. Member for North Norfolk for once; he did not appear to be ready to speak to his amendment. I am sure that he is regretting the absence of the hon. Member for Somerton and Frome (Mr. Heath), because he had not appreciated that the selection list puts the Liberal Democrat amendment first in this group. If I may, I shall help him out somewhat, because I shall strongly oppose his amendment No. 155, and by the time I have finished opposing it, he will understand the basis of the argument—as, I hope, will the rest of the Committee.
 There was a substantial debate on all these matters in another place. We are dealing with an enormously important part of the Bill. 
 I am indebted to Dr. Gerard Panting and Shelley McNichol from the Medical Protection Society, my noble Friend Lord Hunt of Wirral and others for providing me with briefing on these important issues. I am reasonably familiar with some of the issues because I dealt with a lot of medical negligence cases, not only when I was at the Bar, but in my subsequent career as a lawyer specialising in insurance issues. I continue to keep in touch with the subject, because I am deputy chairman of the all-party group on insurance and financial services. My noble Friend Lord Hunt is also actively involved in that very good all-party group. 
 We are always concerned when developments are proposed that could lead to the kind of defensive medicine where highly trained, skilful surgeons and other medical consultants feel unable to use their full skills because they are looking over their shoulder at what the insurance position might be. According to the Medical Protection Society and the National Health Service Litigation Authority, some of the things being proposed, which could be valuable provisions in general terms, would be terribly damaging. In particular, the Liberal Democrat amendment No. 155 could be damaging. 
 I shall first deal with the concerns of Lord Hunt and the NHS Litigation Authority. Clauses 98 and 99 will enable the courts to order periodical payments for future loss and care costs in appropriate cases. In calculating future loss in damages generally, the discount rate had been set at 2.5 per cent. Since then there have been a number of efforts on the part of solicitors for claimants to find a way around that discount rate. 
 I am aware that the Liberal Democrats in another place, and again today, were briefed by the knowledgeable and experienced QC Mr. David Kemp—I pay tribute to his knowledge of this field. He approached the Liberal Democrats to table an 
 amendment in another place to allow periodical payments for the cost of future care to be uprated according to what is referred to as a ''care index'', rather than the retail prices index, on the basis that far higher damages would be awarded. However, Lord Hunt, who led for the Conservatives in another place, was alerted by the NHS Litigation Authority to the fact that such a provision would substantially escalate the level of damages for future care in structured settlements. It would also read across into lump sum damages, making the figures that are awarded much higher. The assessment of the NHS Litigation Authority is that moving to a care index, or RPI plus an additional percentage, would add literally billions of pounds to the accrued claims reserves. 
 I refer any interested Committee members to what was said in another place on 19 May this year, which is recorded in columns 536 to 538 of the House of Lords Hansard. I am referring to an exchange between Lord Goodhart for the Liberal Democrats and Baroness Scotland for the Government. No doubt the Minister will repeat some of the issues that were raised by the Baroness. The debate was on a Government amendment, which was introduced following the Committee stage on Third Reading. In response to the clarification by Baroness Scotland of the reference to RPI and the meaning of proposed subsection (9), Lord Hunt was able to withdrawn his amendment, which limited the operation of an opt-out clause to exceptional circumstances, as was clearly intended. 
 The Government contend that the clauses will deal with the mechanism of payment, and were never intended to increase the level of damages awarded. When the Minister responds, I would be grateful if he would confirm that. 
 Liberal Democrat amendment No. 155, which we understand is also based on the work of David Kemp, QC, would cause 
''periodical payments . . . in respect of damages for the cost of future care or medical expenses''
 to be uprated by some index other than the RPI. That would virtually stop structured settlements in their tracks. It is difficult enough already to find any kind of insurance-based product that enables provision to be made for periodical payments, even increasing in accordance with the RPI. One insurance company has just closed its doors to new business of that kind in the past week, and another company is talking about limiting the range of products that it offers. 
 It is much more serious that continuing attempts are being made in the courts to persuade judges to allow future care costs at a much higher level. To date those attempts have not succeeded. There is also the anomaly, which was highlighted in the report made last week by no less a figure than the chief medical officer, Sir Liam Donaldson, that courts may not take into account treatment available under the NHS. That report received much coverage in respect of other issues. 
 There is a bar in section 2(4) of the Law Reform (Personal Injuries) Act 1948. In practice, one understands how that arises. One wants the best care available to be provided for those who have suffered 
 an injury that is somebody else's fault. That bar has enabled claimants to obtain, where it is appropriate, what is virtually private hospital care, including 24-hour nursing care in their own home. If the Liberal Democrats were to succeed with amendment No. 155, that would have an enormous impact not only on the NHS, which cannot stand many more substantial increases in costs, but also on premiums for liability insurance. We are conscious of the fact that when the Liberal Democrats tabled a similar amendment in another place it was not pursued, either to a Division or on Third Reading. I hope that, having moved the amendment formally, and having been taken somewhat by surprise, the hon. Member for North Norfolk, will not pursue it. 
 Although the Medical Protection Society generally welcomes a move away from lump sum settlements to providing periodical payments to patients in clinical negligence cases, it has identified serious problems. I have met people from the society and I share their concerns. It is important to recognise that the society is a not-for-profit organisation that provides a range of membership benefits, including a occurrence-based indemnity against adverse awards of costs and damages in clinical negligence cases brought against NHS general practitioner members and those working privately. The society represents doctors, dentists and other health professionals. It has more than 114,000 members in the UK alone, and more than 200,000 members throughout the world. 
 The Medical Protection Society has identified difficulties with the Government's proposals, including the fact that reviews would create a continuing uncertain liability that would be difficult to manage. The society would need to increase its reserves to meet the possibility of an order for increased payments some 10, 20, 30 or 40 years after the initial settlement. The society is a mutual organisation that offers indemnity on an occurrence basis. Each year it collects from its members—our doctors, dentists and the other health professionals who treat us and all our constituents—the subscriptions needed to meet the expected liabilities arising from that year. 
 Reviewable settlements would introduce a huge degree of uncertainty about future liabilities and the Medical Protection Society would never be able to close its book on a case. It would have to decide whether to set subscriptions at a level that might leave its members underfunded in future, or raise them to such an extent that they would be overfunded. Either way, it would be our doctors, the vast majority of whom are in the NHS, who would bear the burden. 
 Although the legislation that introduces reviewable periodic payments might not be intended to be retrospective, I know from my professional background that criminal negligence claims are frequently not intimated—so nobody knows that there is a potential claim there at all—let alone litigated, until years after the events that give rise to them. One in five claims made against members of the Medical Protection Society—doctors such as GPs, dentists and other health professionals—in the years from 1996 until and including 1999, where the claim 
 was valued at £0.5 million or more, related to incidents that occurred 10 or more years earlier. I hope that the Minister and other Committee members understand the point about the retrospective effect of what is being proposed. 
 The MPS provides indemnity on an occurrence basis: provided that the doctor was an MPS member at the time of the incident giving rise to the claim, they can apply for assistance, even if they have since left the society. For example, even if they have retired long before the claim is made, they are still covered. To ensure proper funding, it is essential that in each subscription year the MPS receives sufficient income to meet all the claims arising from that year, irrespective of when the claim is made. We do not want to have a situation where, as a result of well intentioned legislation, the Government are creating a medical negligence equivalent of the long-tail claims for things such as asbestosis that helped to cause all the problems in the Lloyd's market, which I am sure that the Minister and other Committee members remember. 
 I will now explain the background to our amendments in this group—amendments Nos. 105, 106, 108 and 107—by referring to a case that is well known to the professionals in this field. In 1995, Guy Parkes was awarded £1.25 million for severe brain damage that he had suffered as a baby in 1962, 33 years previously. When Guy Parkes was an infant, his mother had consulted her GP because of breast abscesses. Unfortunately, the GP failed to notice that Guy was dehydrated and the mother claimed that she was advised to continue breastfeeding. Guy became severely dehydrated; that led to brain damage, which resulted in spastic quadriplegia. Many years later, Guy broke his leg in a care home and his family took legal action over that accident. The solicitor instructed in connection with that much later incident also investigated the circumstances that had led to Guy's brain damage 25 years previously, which led to the fresh claim. 
 The Guy Parkes case demonstrates how long it can take, in certain circumstances, to bring and settle a claim. At the time of Guy's original injuries in 1962, the MPS subscription was only £2. A similar case brought in years to come, after the introduction of reviewable settlements, would present the society with the challenge not only of funding the settlement but of putting aside further funds for a possible future review despite the fact that a settlement review would not have been an eventuality that was anticipated when the subscriptions for the relevant year were set. The retrospective nature of the proposals threatens the whole basis of the way in which the burdens are set on the current generation of MPS members. Its current members would have to pay sums in addition to the subscription. The MPS would have to fund claims arising from current and future incidents and meet additional liabilities incurred by the imposition of retrospective settlements. 
 The claimant's perspective is central. I have talked a lot about protecting doctors and dentists and the 
 society that represents them, but we must always look carefully at, and remember, the claimant's perspective. Even from that perspective, the vast majority of patients who have received a settlement do not wish to continue an adversarial relationship with defendants. They normally want to have a clean break. When the court reaches a settlement, that should be it. That can be provided—and often is now—by structured settlements, but not by reviewable structured settlements. Most defendants would not have the resources to keep track of the changing circumstances of claimants whose financial needs may diminish or increase. 
 In practice, unless our amendments are accepted, the way in which the changes are being put forward will result in awards being increased, but seldom, if ever, decreased. Nevertheless, claimants would have a fear that they might be under the continuing observation of defendants, and that itself might create a disincentive to recovery. 
 Even if the conditions on which a review could take place are narrowly defined now, the opportunity to widen those conditions at a later stage could result in spiralling clinical negligence costs for the NHS. I should have thought that that would be of great concern to the Government, as well as to mutual organisations such as the Medical Protection Society or insurance companies. 
 For cases involving the NHS, which has to fund the payments on a pay-as-you-go basis, there is a real threat of spiralling expenditure in exactly the same way as we have seen in countries such as America, and that would erode the funds available to treat patients on the NHS. I hope that when the Minister responds, he will say that he will consider some of the measures that we are proposing and talk to the new Secretary of State for Health and his officials about them. The Minister will realise that we are raising a serious point, with wide implications for Government expenditure generally. 
 I want to outline briefly a couple of case studies, which I hope will help the Committee to understand the basis of our amendments. The two case studies will demonstrate the extent to which the lawyers acting for a claimant might argue for settlements to be reviewed. The first case study concerns failure to inform. Let us suppose that a patient with severe rheumatoid arthritis attends a specialist rheumatology clinic at her local hospital and is prescribed an anti-TNF drug, such as enbrel or remicade. The patient later develops a plastic anaemia and then takes action against her doctor for failing to inform her of the risk of developing the condition as a side effect of the prescribed drug. The claimant wins damages, paid by means of a structured settlement for continuing care costs. 
 So far so good, one might say. However, if the Bill is not amended, in settling the claim, the patient's solicitor is likely to argue that the settlement should be reviewable at a later stage, because the patient might develop other side effects of the drug. First, the patient might develop formation of autoimmune antibodies. Secondly, the patient might develop TB. Thirdly, the 
 patient might develop heart failure. Fourthly, the patient might develop infections. Fifthly, the patient might develop malignancies. If the Bill were not amended, such arguments would be—perfectly reasonably—put forward on behalf of the patient. 
 The second case study is that of the failure of a dentist extracting a tooth to provide antibiotic care for his patient who has a heart condition and is therefore vulnerable to infection. As a result of the oversight, the patient develops sub-acute bacterial endocarditis and suffers a small stroke, which affects his balance and his ability to work. Because of his loss of income and ongoing health problems, the patient would then take legal action against the dentist. In that scenario, the claimant's lawyer would argue for a review to take place in case there is a recurrence of the condition and the patient may require further treatment, heart surgery, or may suffer a stroke. 
 There is a need to ensure that the Government amend the Bill to take into account the risks that I have mentioned. Amendment No. 108 says: 
''An order under this section shall apply only to cases in which it is admitted or proved to be a significant prospect of serious deterioration, or development of a serious further medical complication . . . consequent from the act or omission which gives rise to relevant cause of action, as identified by the medical evidence before the court.''
 If the Government were to accept such an amendment, that would be helpful to the Bill, because it would provide some reassurance. 
 Amendment No. 106 would insert the words, 
''save that this provision does not apply to any case in which the injuries involved occurred prior to the date on which the provisions of this Part of the Act comes into force.''
 The Bill would then have a provision that ensured that the element of retrospectivity that I have talked about would not exist. For the reasons that I have set out, the Liberal Democrats are mistaken in their attempts to introduce amendment No. 155. Our amendments Nos. 105, 106, 107 and 108 would improve the Bill substantially because they would remove some retrospectivity and achieve what the Government want while reducing the risks to which I have referred.

Norman Lamb: I apologise to you, Mr. O'Brien, and to the Committee for being caught on the hop when it was time to move my amendment. It is important to state that, in a sense, our amendment and those tabled by Conservative Members reflect the balance of interests and the need to balance those of different competing parties. Our amendment reflects the worry that the retail prices index does not reflect the reality of the rising costs of care. If we are looking at the matter from the perspective of the injured party who has pursued a negligence action successfully, that individual will lose out in the future unless the amendment is accepted. We all know that the cost of care rises at higher rates than the RPI reflects.
 I fully recognise the arguments of the Medical Protection Society and I understand its worries about retrospection. I am talking about the clause as a whole and commenting, in a sense, on the points made by the hon. Member for Surrey Heath. Genuine concern is felt about review payments and I accept that there is a strong case for as much certainty as possible. 
 Amendment No. 108 would at least restrict the basis on which a review could take place. The Government should seriously consider such matters.

Christopher Leslie: The existing compensation system for future losses by way of lump sum payments is unsatisfactory. It can often lead to cases of undercompensation as well as to overcompensation. Therefore, a system of periodical payments can begin to ensure that the entitlement to compensation for a claimant can continue for as long as is needed and that it can better match the needs of the individual.
 The amendments tabled by the hon. Member for Surrey Heath relate, in particular, to the variation of periodical payments. I shall try to answer in detail the points that he raised. I shall also deal with amendment No. 155 tabled by the hon. Member for North Norfolk. Amendment No. 105 would remove new section 2B of the Damages Act from the clause, the effect of which would be to stop any variation of a periodical payment. We cannot accept it. 
 In the consultation paper entitled ''Damages for Future Loss'', which formed the basis of the new system, we sought views on several options in respect of variation. The majority of consultees were in favour of some form of variation, with a significant number wanting something much wider than what we are now proposing. However, we understand the views expressed by the insurance industry and the organisations that were highlighted by the hon. Member for Surrey Heath. We accept that we need to take great care over such matters, which is why we are adopting a cautious approach, 
 As my noble Friend, Baroness Scotland, said in another place, we intend to provide limited scope for variation, which will be subject to robust controls. It is intended that the initial order will provide for variation only when there is significant medical deterioration or improvement in the claimant's condition. That must be foreseen at the time of the original court order, and when the possibility of variation is specifically provided for in the order. That will be no more than is already provided for by the existing system of provisional damages, except that it will allow for significant medical improvement as well as deterioration. It will also allow defendants to apply; at present, only claimants can do so. 
 There are built-in safeguards in our approach. The power to vary awards of periodical payments will be tightly drafted and carefully controlled, and include a requirement for the court's permission before any application for variation can be made. Any future exercise of the Lord Chancellor's powers to specify circumstances in which an order can be varied would be subject not only to consultation, but to the affirmative resolution procedure by Parliament, so there would be another opportunity should there be changes to the regulatory framework. 
 Defendants and insurers usually provide for such eventualities by contingency payments. However, those payments often compensate for the chance that a future need may arise, rather than the need itself. For example, if there were a 20 per cent. chance of a significant medical deterioration occurring, but it 
 never occurs, the defendant or insurer would have made an unnecessary payment. If the deterioration occurs, the claimant will be seriously undercompensated because he will have received only 20 per cent. of the compensation required to meet his needs. 
 In such cases a variable order would provide the best solution. Defendants and insurers would not have to make payments for events that do not occur. If they did, claimants would receive the full compensation to which they were entitled. That is an appropriate way forward, and that is one of the reasons why amendment No. 105 is not justified. 
 Amendment No. 108 would limit the provisions that may be included in an order made by the Lord Chancellor enabling variation of periodical payments. I am concerned that the circumstances in which variations would be allowed by the amendment are more restrictive than we intended. The amendment would restrict variation only to cases in which there is deterioration in the claimant's condition. It would not allow a variation if the claimant's condition improved, nor would it apply to the defendant. 
 Variable periodical payments should be available in those circumstances as well. Amendment No. 108 is too limited and restrictive in that sense. This is a developing area of the law, and we should keep open the option of altering the scope of variation, if necessary. The need for consultation and the affirmative resolution procedure provide necessary safeguards in that respect. 
 Amendment No. 107 would remove the Lord Chancellor's power to amend or apply legislation governing provisional or further damages—processes that are most closely akin to periodical payments in the current system. The amendment would wreck much of the provision of the new forms of periodical payment that we wish to put in place. The initial order for variation should operate on a similar basis to that on which provisional damages do at present. 
 It is practical that an order should have the power to apply legislation that covers and governs provisional damages, and that should also apply to periodical payments. Courts may wish to award a lump sum by the way of provisional damages in conjunction with a variable periodical payments order. If the power to amend provisional damages legislation were removed from the scope of the order-making power, any necessary amendments to ensure that the two regimes could operate in tandem would have to be made through primary legislation. That would be cumbersome and inefficient. In order to ensure consistency between the existing regime and the new periodical payments arrangements, we need the power to apply legislation governing the provisional or further damages arrangements as they currently exist. 
 Amendment No. 106 deals with the fascinating subject of retrospectivity, and raises the issue of whether we should limit the application of the order to allow variation to injuries that occurred after the date of commencement. I am concerned 
 about the approach suggested by the amendment. The benefits that we wish to put forward in periodical payments would be delayed if the amendment took effect, and benefits under the periodical payments might not be felt for many years. Claimants might have to continue to be undercompensated—or indeed overcompensated—for a substantial period should we accept it. 
 Nevertheless, I understand the significance of the issue raised by the hon. Member for Surrey Heath on the timings and retrospectives, and I would like to place on the record how we intend to implement those provisions. Clauses 98 and 99 will be implemented within 12 months of Royal Assent but not before April 2004. We intend that the power to order periodical payments will apply to all cases where orders or settlements have not been made before the date of implementation, as the provisions are simply an extension of existing practice. However, as the initial order that we propose for variation will introduce provisions that do not currently exist—that is, the possibility of variation for improvement and the right of defendants to apply—we intend that the initial order allowing variation would apply only to proceedings issued on or after the date of implementation. 
 I hope that that two-stage approach and the early notice of our intentions will go some way to placating some hon. Members and will assist defendants and insurers in planning accommodation of the detail.

Nick Hawkins: What the Minister has just said is of assistance, but before he finishes his response to the group of amendments, can I press him to confirm that he will talk to his counterparts in the Department of Health and ensure that his officials sit down with officials in that Department to look in particular at the implications for the NHS that the NHS Litigation Authority has been raising with my noble Friend Lord Hunt of Wirral? If the Minister is prepared to give that undertaking while we are waiting for the provisions to come into force, the matter will be considered again. Could those discussions take place before the Bill finishes its passage, so that if further Government amendments were required they could be considered? That would be enormously helpful.

Christopher Leslie: I can probably pre-empt many of the hon. Gentleman's concerns by assuring him that in the process of drawing up these provisions the Department has already had extensive discussions and consultations with the national health service and the Department of Health in particular, as this measure clearly has significant implications for it.

Nick Hawkins: I appreciate that but a body as important as the NHS Litigation Authority says via Mr. Stephen Walker that it has serious concerns and Mr. Walker is going to see my noble Friend Lord Hunt of Wirral. Clearly, some of those earlier discussions did not take account of some of the matters raised today. If those matters had all been dealt with satisfactorily, the NHS Litigation Authority would not be raising them with my noble Friend. Because the issue is still live and my noble Friend has
 urged me to put those matters on the record, a further set of discussions is necessary.

Christopher Leslie: Because one source in one organisation makes an allegation does not always make it absolutely true. My understanding from the Department of Health and the officials who have talked to my Department is that they are content and happy with these provisions. I accept that we need to take some level of cautious approach, particularly on how this developing area of law proceeds. I have already given a commitment that we will take a cautious approach in looking at further orders affecting this area of policy. Clearly, we must take a number of factors into account. If the hon. Gentleman is urging a prudent and cautious approach, I am more than happy to agree to that attitude, which I believe we have already taken in drawing up the provisions.
 I turn to amendment No. 155, which would prevent periodical payment orders being linked to the retail prices index where the damages relate to future care and medical costs. In a similar way to, but not quite in the same vein as the hon. Member for Surrey Heath, I am wary about the amendment. For a start, it makes no provision for indexation, in which case the claimant would be worse off, but, more than that, the suggestion that there should be links to another inflation index raises the worry that insurers would be unable to provide a product; their financial regulations limit the index-linked products that they can provide. As a result, awards may have to be made by way of lump sums, which are effectively linked to the retail prices index. Therefore, the whole purpose of giving the courts greater powers to order periodical payments might be defeated. 
 We need to make sure that we have a sound, firm foundation for the indexation and the awarding process. There are arrangements in the clause for variations, and the periodical payments approach gives the claimant an end product that is much more tailored to their needs. 
 I believe that I have dealt amply with many of the concerns that hon. Members have raised. For reasons that I have given—and others—I do not believe that taking out the RPI link would be appropriate. I hope that the hon. Gentleman and the hon. Member for Surrey Heath will reconsider their amendments.

Norman Lamb: I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 98 ordered to stand part of the Bill. 
 Clause 99 ordered to stand part of the Bill.

Clause 100 - Power to alter judicial titles: Northern Ireland

Nick Hawkins: I beg to move amendment No. 26, in
clause 100, page 54, line 22, leave out 'Lord Chancellor' and insert 'Prime Minister'.
 We have come to the sensitive subject of Northern Ireland. I am sorry that no one from the Northern Ireland parties was appointed to sit on the Committee, because the hon. Member for North Down (Lady 
 Hermon) has been helpful in a number of recent Committees considering legal Bills of which I have been a member. We think that the Prime Minister should make the orders about any alteration in judicial titles in relation to Northern Ireland. That is a small but important point. Again, it feels somewhat surreal debating whether the Lord Chancellor will do something, when the Government have said that, if they have their way, there will not be a Lord Chancellor in about three years—

Andrew Miller: Hear, hear.

Nick Hawkins: I hear the hon. Gentleman talking about getting rid of the Lord Chancellor, but I went with the new Lord Chancellor, Lord Falconer, to Her Majesty the Queen's official opening of Tynwald, the Manx Parliament, yesterday, and it is clear that the present Lord Chancellor is thoroughly enjoying his role. He also enjoyed all the ceremonial that we saw at Tynwald. It is apparent that the Isle of Man is keeping all the traditions that the Government want to sweep away. Lord Falconer might reflect on that when he considers what his Government are doing. Who knows, the Government might have a change of policy if the present Lord Chancellor has his way.
 On the sensitive subject of Northern Ireland, any changes in judicial titles should be made by the Prime Minister. That is a serious point, although it can be quickly debated.

Christopher Leslie: I realise that the hon. Gentleman's amendment refers to the narrow terms defined in the clause, but dare I suggest that there was a bit of mischievous intent in tabling it? Perhaps he was seeking to reopen discussions about the changes affecting the position of Lord Chancellor. He seemed to suggest that in his comments. However, it would not necessarily be in order for me to address those points in detail. Suffice it to say that I do not think that there is any convincing or compelling reason why the Prime Minister need exercise a power of the type the hon. Gentleman mentions in Northern Ireland, when the Lord Chancellor is capable of dealing with it.
 Titles are a matter for the Crown, and it is for Ministers of the Crown to advise on them. Therefore, the Lord Chancellor, who is to be the Secretary of State for Constitutional Affairs, is quite capable of undertaking that function. The current arrangement is adequate, and we see no need to have the powers vested in the Prime Minister, as opposed to the Lord Chancellor, so I ask the Committee to reject the amendment.

Nick Hawkins: I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 100 ordered to stand part of the Bill.

Clause 101 - Official solicitor of Northern Ireland

Nick Hawkins: I beg to move amendment No. 25, in
clause 101, page 55, line 25, after 'Court', insert 'or a barrister'.
 This amendment is a small point. I declare an interest as a member of the Bar of England and Wales, although I am not currently in practice. There seemed no reason why a barrister in Northern Ireland should not be considered as a possible appointee as an Official Solicitor. I am not a member of the Bar of Northern Ireland, and I have never practised there, but I know that in the courts of England and Wales there is no restriction. The Minister will correct me if I wrong, but I think that those qualified at the Bar, rather than as solicitors, have been appointed as Official Solicitors in the past. I want to probe the Government on that small point.

Christopher Leslie: I hope that the hon. Gentleman is holding fast to his seat: I am sympathetic to his amendment. It seeks to allow barristers, as well as solicitors, to be eligible for appointment as Official Solicitors. At present, only solicitors of seven years standing are eligible for that post. The position advocated by the hon. Gentleman is attractive. I see no immediate difficulty with what he is trying to achieve, and it merits further consideration, in particular in Northern Ireland. However, I urge him to withdraw his amendment for two reasons. First, I am advised that there might be drafting issues that we have to get right. Secondly, I want the opportunity to give further consideration to the matter as it applies to Northern Ireland. There is merit in his suggestion, and I hope that we can act on it at a later stage.

Nick Hawkins: I am delighted to hear that. It shows how flexible this Minister is able to be. In those circumstances, I am happy to withdraw the amendment, so long as the Minister is happy when he introduces a Government amendment to admit that the idea came from the Conservative Benches. On that understanding, I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 101 ordered to stand part of the Bill. 
 Clauses 102 to 104 ordered to stand part of the Bill. 
 Clause 107 ordered to stand part of the Bill. 
 Schedules 7 and 8 agreed to. 
 Clauses 108 and 109 ordered to stand part of the Bill.

Clause 110 - Short title

Christopher Leslie: I beg to move amendment No. 23, in
clause 110, page 59, line 28, leave out subsection (2).
 This is a technical amendment, known as a privilege amendment, that is inserted in Bills that commence in the House of Lords and deal with charges on public funds. It is intended to avoid formal infringement on the financial privileges of the House of Commons. It is designed to show that the Lords are able to legislate on such matters, but that that ability is not absolute, being subject to the tolerances of the House of Commons. The amendment is a procedural device to avoid the impression that the other place has authorised expenditure.

Nick Hawkins: Unlike the Minister, I have come across such an amendment before. I know that it is traditional, I know the reasons for it and I am happy with it.
 Amendment agreed to. 
 Clause 110, as amended, ordered to stand part of the Bill. 
 Further consideration adjourned.—[Ms Bridget Prentice.] 
 Adjourned accordingly at a quarter-past Four o'clock till Thursday 10 July at half-past Nine o'clock.